The Berkshire Hathaway Annual Shareholder’s Meeting of 2023 was a highly anticipated event for investors and fans of Warren Buffett, the legendary CEO and chairman of the conglomerate. Held on May 6, 2023, in Omaha, Nebraska, the meeting was broadcasted live by CNBC and streamed online for the public to watch. Here are some key insights from the meeting that investors and enthusiasts should be aware of.
Buffett and Munger’s Successors
One of the most significant takeaways from the meeting was Buffett’s announcement of his potential successors. Alongside Charlie Munger, Buffett was joined by two vice chairmen, Greg Abel and Ajit Jain, who are widely seen as potential successors to Buffett. The four executives answered shareholders’ questions for over five hours, covering a range of topics from banking, insurance, acquisitions, dividends, cryptocurrencies, inflation, and more.
Buffett disclosed that he had chosen Greg Abel as his successor as CEO of Berkshire Hathaway in case he died or became incapacitated. He said that Abel had proven himself as the vice chairman of non-insurance operations, overseeing a diverse portfolio of businesses such as energy, railroads, manufacturing, retail, and services. He said that Abel had the “culture” and “talent” to run Berkshire in the future. He also praised Ajit Jain as the vice chairman of insurance operations, saying that he had saved Berkshire billions of dollars over the years by making smart underwriting decisions.
Banking and Acquisitions
Buffett also discussed the recent turmoil in the banking sector, which saw several regional banks fail due to exposure to risky loans and deposits. He criticized some of the practices of First Republic Bank, which offered non-government guaranteed jumbo mortgages and collapsed in April 2023. He contrasted that with Berkshire’s insurance business, which he said was more conservative and resilient. He also praised the performance of Berkshire’s bank investments, such as Bank of America, Wells Fargo, and American Express.
Buffett also discussed the challenges of finding large acquisitions at reasonable prices in the current market. He said that Berkshire had $140 billion in cash and equivalents at the end of March 2023, but he was not willing to pay “crazy prices” for businesses. He preferred to buy whole businesses rather than stocks, but he would not rule out buying more shares of companies that he already owns or likes.
Cryptocurrencies and Inflation
Buffett and Munger shared their thoughts on cryptocurrencies, which they claimed were not productive assets and had no intrinsic value. They expressed skepticism about why people were buying them or what they hoped to achieve. They warned that cryptocurrencies were likely to end badly for investors and regulators. They also criticized SPACs (special purpose acquisition companies), which they claimed were a form of gambling and speculation.
Buffett and Munger also discussed inflation, which they viewed as a serious issue that could erode the purchasing power of money and harm businesses and consumers. They said that they were seeing rising costs and prices across many of their businesses, such as materials, labor, transportation, and insurance. They acknowledged that they were attempting to pass on some of these costs to their customers, but they could not do so fully or easily. They attributed inflation to excessive money printing and fiscal stimulus by the government.
Overall, the Berkshire Hathaway Annual Shareholder’s Meeting of 2023 provided valuable insights into the thoughts and opinions of Warren Buffett and Charlie Munger. The meeting shed light on the potential successors to Buffett and their qualifications for the role. It also revealed Buffett’s stance on the banking sector, acquisitions, cryptocurrencies, and inflation. Investors and enthusiasts should consider these insights when making decisions about their investments
